The Pros and Cons of Specializing in Real Estate Domains

The Pros and Cons of Specializing in Real Estate Domains
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  • 0:02 Real Estate Domain…
  • 0:39 Types of Clients
  • 1:13 Types of Properties
  • 2:14 Types of Locations
  • 2:53 Pros & Cons of Specializing
  • 4:15 Lesson Summary
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Lesson Transcript
Instructor: Ian Lord

Ian is a real estate investor, MBA, former health professions educator, and Air Force veteran.

Real estate agents may choose to specialize their practice according to certain types of clients, properties, or locations. Learn more about the different real estate domains and gain an understanding of the pros and cons of specialization.

Real Estate Domain Specialization

Ted just got his real estate license and is putting serious thought into how he's going to approach his career. He knows that some of his real estate friends are generalists, meaning they work with all types of buyers, sellers, and properties. But others are specialists. They focus their real estate work in a particular niche, or real estate domain.

Real estate domains can be broken down into three basic categories: type of client, type of property, and type of location. In this lesson, we'll look at examples in each of these categories and evaluate the pros and cons of specializing in real estate domains.

Types of Clients

Client-based specialization involves working with specific types of customers. Ted likes the thought of helping people realize their dream of home ownership. He could choose to follow his passion and work exclusively with first-time homebuyers. Of course, that isn't Ted's only option. Since there are a lot of distressed properties in his area, he could instead choose to specialize in clients who need to sell fast or property investors who want to buy cheap.

Other types of clients that Ted could focus on include:

  • Veterans
  • Senior citizens
  • Ranchers or farmers
  • Individuals who are relocating

Types of Properties

Some agents focus on properties rather than clients. Property specialization involves the type of building or property the client is buying or selling. The two most well-known property types are residential and commercial. But there are many subcategories that can be considered as well.

For example, Ted's town has a district with quite a few historical properties. As a member of the local historical society, Ted is very familiar with these properties and feels like he could effectively sell them to interested parties. Ted could also consider working with real estate owned (REO) properties. Remember, Ted's area has a lot of distressed properties. If lenders have an excess inventory of REO properties (foreclosed properties that did not sell at auction), Ted could get those properties on the market.

Some other types of properties that Ted could specialize in include:

  • Farms
  • Ranches
  • Townhouses
  • Condos
  • Luxury homes
  • Apartment buildings
  • Retail spaces
  • Industrial properties
  • Suburban office buildings

Types of Locations

If Ted doesn't want to focus on specific types of clients or properties, he could consider a third real estate domain: location, which involves the overall area surrounding a property. Every good real estate agent knows that location can seriously impact the value of a property. Since Ted is very familiar with the geography of certain neighborhoods in his town, he could specialize in helping others to buy and sell in these neighborhoods. For example, Ted could focus on the waterfront or the downtown area.

Other examples of location specializations include:

  • Golf course communities
  • Vacation communities
  • Master-planned communities
  • Rural areas

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